Wage slave, debt slave

This article has its roots in an article I wrote some time ago that used the terms wage slave and debt peonage--terms that some people objected to. Those making free choices aren't slaves, they said, even if their poor choices result in a hard life. There's some truth to that. But there's also some truth to the notion that our system makes it easy--almost automatic--for people to trap themselves.

I've thought about it a lot since then, and found that the terms still resonate with me. It's true that the system makes people complicit in the process that traps them, but that fact doesn't make it okay. It seems to me that the system is designed, whether consciously or not, specifically to get people locked into it.

Student loans

It starts with student loans--available to any student, pretty much without regard to whether their course of study will give them the skills and certifications that will produce an income to support the debt load.

Students with parents who are both generous and affluent can escape. (I largely did.) Students who are both unusually smart and unusually wise, or else are lucky enough to get very good, thoughtful advice, can escape. But most students come out of college with debts that lock them into the money economy. They have no choice but to earn enough money to pay off that debt--on top of the money they need to support themselves, of course. Even bankruptcy won't free them.

Which isn't to say that student loans are evil. For many poor students who couldn't otherwise afford to get an education, they're a marvelous tool--something that can break generational poverty and let people aspire to some of the great things that can follow on from education.

But for too many people, student loans are a default choice that they make--often before they've even graduated from high school--without even imagining that there are alternatives.

And that's just the beginning of it. The default path is to graduate from college and then get a job to pay off the student loan (and pay living expenses). The wise graduate might know that it'd be a good idea to get that loan paid off quickly, but that's still likely to take a decade. It's not practical to put your life on hold until then, so you proceed with all the ordinary aspects of living your life: getting married, having kids, buying a house--with the attendant mortgage.

Mortgages

Mortgages are no more evil than student loans. If you buy a house that's well within your means, a mortgage can be cheaper than renting.

But just like a student loan, a mortgage traps you in the money economy--you have to earn enough money to make that mortgage payment (and your student loan, and all the other costs of supporting your family), or else you lose your house.

I won't even talk about credit card debt.

The trap

This all works fine for most people, but it fails badly for some--for people who can't find work or lose their job or become disabled. It fails less badly for others--people whose degree prepared them for work that they enjoy, but that doesn't pay well enough to both support them and get them out of debt, or for people whose work pays well enough but that they don't enjoy. Overall, I'd say it fails to some extent for lots of people.

There are all kinds of ways to support yourself besides working at a regular job. You can be self-employed, you can do freelance work, you can be a writer or an artist, you can grow your own food and make the things you need. Most of those ways won't support you at a middle-class standard of living, but they're an option. Except that they aren't an option to most people, because most people are in debt. And most people in debt can't cover their cash expenses any other way than by working at a regular job--those other options, although they can provide enough to eke out a meager existence, don't generate enough cash to do that and make the monthly payments.

The way out

In the end, debt and wages work together to trap the overwhelming majority of people.

It's hardly an airtight trap. You can buy your way out if you earn good money: Keep your expenses low, pay off those debts, get enough savings that you don't need to borrow again, start making some investments.... That path to financial independence is well known to anyone who reads financial blogs.

But it's a path that most high school students don't learn about. Most people only begin to understand when it's too late--after some young kid (i.e. them at age 17), guided by well-meaning but under-thoughtful parents, guidance counselors, and college admission advisors, have set them on the path to being locked into employment by wages and debt. Once you're there, it's a long hard slog to switch back to the path to financial independence.

One thing I'm sad about is that so many people who have managed to find the path to freedom have so little sympathy for the people who went badly astray. Granted, those who have just begun to find their way will be in the midst of difficult striving, but it somehow seems to me that should give people more empathy with those who, following the default advice, headed down the path of debt. In fact, though, it seems to give them less.

There's nothing wrong with debt and there's nothing wrong with wages. But I think the system we have now is pernicious. It makes sure that everyone starts out with a load of debt to trap them into working for wages at exactly the moment that they might otherwise be exploring other possibilities, and keeps them there until family obligations and a promising career make it hard to escape.

It's not impossible to escape. Wise Bread is full of advice, both tactical and strategic, for finding the path out of the debt and wage trap. Better if you never get trapped in the first place, but who among us has such luck? Who among us was smart enough or lucky enough or well-advised enough as teenagers to find the path to financial independence early? Too few.

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Guest #1

It turns out that is better to start off your adult life at 0 than it is -50K or even more. I wish I had that insight before taking out all my student loans.

About people who are free of the money trap, or getting free, not having sympathy for others. Isn't this like former smokers? They turn against what they used to do so vehemently that they also reject the people who are still trapped. You have to wonder if they're just afraid that associating with the hooked will get themselves hooked again. It's not catching. Or doesn't have to be.

It is difficult, I've struggled with credit card debt for years. I have historically had a hard time with impulse buys but I did dig myself out of $36,000 in debt by being quite frugal. Now with my home, I bought frugal, buying a home that was about half of my gross earnings in a single year. I was able to pay that off within a couple of years. It really is the nickel and diming that keeps kicking my butt, not the big stuff.

Without debt, we wouldn't be able to live beyond our wildest dreams. But, seriously... debt is what keeps a lot of people honest, ironically. I don't think anybody really needs a lot of money to survive. With debt, one keeps focused for the life of the debt to pay it off.

Nickel and Dimed, I am impressed you were able to rack up $36,000 in CC debt. I hope to someday have CC companies allow me to borrow so much ;) I wrote about Controlling The Urge To Splurge last night. You might enjoy it.

It's true that debt seems to be inevitable. I wish I had known at a younger age that it didn't have to be like that with basic financial principles such as tracking your earnings, budgeting and being frugal.

But I am HAPPY that I was $60,000 in debt from student loans. (Never had CC debt)

3) The basics of personal finance. Such as tracking money, being careful, budgeting etc.

Now less than a year after I cleared my debt, I now have a net worth of $70,000 or so. :)

I feel a slight bit of sickness when I think that I could be at $100k + right now (I'm 26) but .. I think I'm doing pretty good.

As for future debt such as a mortgage or kid's educations, I plan on not incurring any. I want to try and buy a home outright in cash (50%, BF pays the other half), and my kids are going to learn the same way I did -- with scholarships, loans.. and if I have the means at the end, I will clear their loans in full if they have proven to be good students & responsible kids in clearing their debts.

Was it really the $60,000 in debt that taught you? Or was it just as much your life experience up to that point? It sounds to me like you already knew what to do--not that having the debt didn't make you learn some money-management skills, but it doesn't sound like you ever thought that you should follow the conventional path of paying off your student loans over ten years, the way so many people do.

It's actually this idea--that debt is a useful motivator to get people to work hard and to learn how to manage their finances--that bugs me. Why can't people work hard because they see things that need doing and because they seek out things that they want to do? Why can't people learn how to manage their finances by watching their parents and their parents' friends, by listening to the parents and their teachers, by reading books and magazines, by learning from the cultural stories with role models good and bad? (I mean, obviously that is exactly how people do learn how to manage their finances--they just learn bad ways to manage their finances because so many of the examples out there are bad. But they don't need to be.)

I think you've put your finger on why the system is set up this way. Buried underneath everything else is the fear that, if people weren't in debt, they wouldn't get up and go to work every day.

It's kind of why I'd like to see things changed. As things stand, a lot of people have to worry that any little mistake could cost them all their wordly goods and their entire future. If things were different--if most people had a comfortable emergency fund and little or no debt--they'd be in a lot better position to insist on fair treatment, to pick and choose among the alternatives on offer, to tell psycho bosses that they need to find a new sucker. I think we'd all be better off. (Except the psycho bosses, who'd have to either learn to play well with others or else do a lot more of their own work.)

Philip--AMEN, AMEN AND AMEN! I have a long background in the credit industry and can support what you've written down to the last detail. (In fact I have written on exactly that!).

I've seen countless examples of young people with large student loans snowball into greater debt in pursuit of the 'American Dream', which seems to have morphed into a comfortable life in the suburbs, complete with an oversized house, two late model cars, an annual vacation (or two), regular meals outside the house, an expensive college education for the kids, etc, etc.

Newsflash: the prototypical American Dream lifestyle is not affordable on the typical American household income. And that's where debt comes in; it's being used to cover the difference.

If I can add a point on the mortgage side--one of the downsides of a mortgage, especially in a down economy such as we're now experiencing, is that the homeowner has less flexibility to make a move to pursue better employment opportunities in another state. The mortgage acts as an anchor, especially when housing isn't very liquid, and at the very time you might need to make a job related move. In a real way, it impairs the ability to make a living. Most people look past this because it's a non-factor when the economy is good and jobs in the local area are plentiful.

But as you said, these things aren't taught in school, so people have only one way to learn them--the hard way.

I think there are way too many "bad" examples out there for sure! We need to stop trying to keep up appearances that we can't afford. I hope that some day it will be "cool" to be a saver and not an unconscious spender. Parents need to set the foundation for their children, they need to be role models and truly walk the walk. Give the kids the financial tools they need and then let them do with it what they will. I wonder, do credit card companies still set up booths at colleges? This seems like a major pitfall to me for those that don't understand the impact of how long they will be working to pay off those cards. It seems like free money to alot of kids, especially if they have never had access to credit like that. Seems shady to me...if it's still common practice.

Hi Phillip - Yes, FEAR is such a supreme motivating factor. Fear of getting laid off made my apply and attend business school part-time for 3 years. Fear of not being able to pay my mortgages and going into a deep debt hole is what keeps me coming into work on time and busting my butt.

But this is good fear I believe. A fear that solidifies discipline and my work ethic. For I might as well try as best as I can early in life, then when later when I'm too tired.

I have made a conscious choice to no longer be a wage/debt slave after 20 years of work. Just have 10 more years to go!

Yes, fear is a motivating factor--but it's hardly the only one, and to my mind it's not the best one. I mean, really: Twenty years of fear (even if gradually declining fear) strikes me as a poor trade-off for achieving even as important a goal as financial independence.

How about twenty years of joy, with financial independence coming (albeit at a lower standard of living) quite a bit sooner?

I'd rather live large on a small budget now, than spend years living in fear so that I can live large on a large budget sometime down the road.

I'm sure I'm not alone, but an awful lot of people seem to think more along the lines you do than along the lines I do. Mine seems to be the minority position.

It seems to me that you're saying that education, if you have to go into debt for it, is bad. But without a decent education, without incurring some debt, most people are stuck in $8 hour jobs. You CANNOT live on $8 an hour. And yes, I know there are a few people like Bill Gates who don't have a college degree and are billionaires. Hardly a common occurrence or something most of us can count on.

I was not able to get the loans I needed to pursue my dreams and if I had, I could have attended a better school that would have moved me toward my dream career a lot sooner. Instead, I've had to struggle, in menial jobs, in dead end opportunities - always keeping my eye on that dream - but its taken 10 years longer to get to where I am than if I'd taken on a debt load and gotten to a better school.

And before you come back and say, "well, you could've studied harder in school & gotten scholarships" let me tell you I came through all of my schooling with a 3.5 gpa average and still didn't qualify for scholarships. Sorry, I'm not a star athlete either.

You seem to say that only the wealthy, those who have the means to go to say medical school without taking on loans, deserve to. I veheminently disagree. Education at any cost is worth it.

My point is that not all debt is bad. Debt to improve yourself can be (note I said "can be") a good thing. I think you spend too much time tearing down all debt instead of teaching how to manage debt, get out of bad debt and use debt to our advantage.

Not at all. Education is good--and, sometimes going into debt to get an education is not just a reasonable choice but an excellent one. As I say in the post, sometimes it's a tool that can break the cycle of generational poverty.

Where I disagree is that education is worth it "at any cost." Just as with everything else, cost matters. You wouldn't pay a billion dollars for an associates degree from the local community college--and not just because they charge less than that.

So how do we figure out what the right cost for an education is? To my way of thinking it depends on a lot of things--what the student wants to do with his life, for example. But one important factor is how much a successful graduate will be able to earn. It's one thing to borrow $300,000 to become a surgeon, and something altogether different to borrow $300,000 to get a PhD in literary criticism.

The problem that I see is that this is a difficult analysis. It requires specific skills to analyze (compound interest calculations, the present value of future dollars) and depends on many unknowable things (the future job market). And yet, we expect high school juniors and seniors--a depressingly large fraction of whom can't even balance a checkbook--to not only do the analysis, but then to stake everything they own and all that they'll ever earn on the proposition that they'll pick a school and a degree program that will give them the tools to earn a good income, and that they'll be able to follow that up with actually earning the income. And the people advising them all too often think like you do: than an education at any cost is worth it.

I'm not saying that its wrong to borrow money to get an education. I'm saying that we ought to give high school students the tools to do the analysis, and that the guidance counselors and admissions officers advising them ought to make sure that they know that there are pathways that don't involve a lifetime of debt. Borrowing money for an education may well be the right path, but it shouldn't be taken automatically with no thought at all as to where that path leads.

Rosa #14

The choices people make - how voluntary are they? If you don't even know there are other options until you've already signed the loan papers, or if you've gone through school being told you are DOOMED to a life of poverty and horrible meatpacking jobs if you don't go to college, any college, no matter the cost (as I did, in the "college track" at a working-class high school).

It seems like it's denying people's agency to say they don't really want what they show they want (to work 40+ hours and have a lot of clothes and toys and electronics but no security or free time). But at the same time, my own experience is that a lot of times I got things I thought I wanted and then didnt' want them.

@RTWG - I have a bachelor's degree in a fairly useless liberal-arts topic, and until my current job I have *never* had a job that required a degree. I've known lots of people who make very good money with only a high school diploma. They work in sales, technical writing, business management, software production, project management - not to mention the trades... it has gotten harder to get a job without a degree, because so many people are getting them and it's an easy way to filter applicants. But it's not impossible - and if you get a bachelor's degree but don't learn good corporate work habits or make good contacts, you'll still be stuck in an $8/hr retail job.

Name-brand schools will only get you so far. In the end it comes down to what you can bring to a job (education, skills, experience, etc) that determines if you will be successful in it. And in terms of getting a job, it usually has more to do with networking than anything else, especially name-brand schools.

You complain about not getting the loans to go to your dream school (first of all, stop acting like student loans are a RIGHT --you were not denied a civil right), but there are alternatives. You could have worked through school and attended part-time, or perhaps saved in other ways, like commuting instead of living on campus...etc.

Someone who has gone to say, Columbia or Brown has a much better network system set up by name only. In this economy in some professions, the name of your school will automatically grant you an interview. The fact is private schools have much better programs, many more opportunities, and attract better staff. Yes, the education is comparable to something you'd get at a public state school, but that's not the point. Going to a name school, even at an expense, could possibly work out better than going to a no-name school.

(Also, many private schools end up cheaper than state schools. Why? Bigger endowments. More affluent alumni. Many students who make less than the "average" receive a free ride.)

Dan #17

Great post here. I like the way you attack the traditional mindset of frontloading a massive amount of debt and then working your whole life to pay it off...

With regard to your empathy point at the end... it is difficult to be empathetic towards people who are actively engaged in breathtaking stupidity. When did it become ok to only pay the minimum monthly balance on a credit card? As for the sub-prime mortgage crisis....those mortgages were given to people who had no business in buying a house, much less the enourmous houses everyone seems to be buying.

RTWG--I have to disagree with your criticism of Philip on student loans. Why is the cost of a college education so high? Why is it always going higher?

It's because everyone is going to college. Higher demand = higher cost. The rate of return on a college degree is falling in most fields because the cost of the education is rising, and salaries are falling because there's no shortage of college educated prospects anymore. This is probably the main reason you haven't had so much success since graduation. Most fields are just too crowded with candidates and wages are falling.

And how is everyone affording all that education? Loans. That's the point. It's not as worth it for most people to run up debt for a college education as it was 20 or 30 years ago, but the mindset that a college education lifts all boats isn't keeping up with the changing times.

Skilled trades, which often pay more than college norm jobs, usually require only a year or two of technical training, or a paid apprenticeship, but jobs go begging for want of applicants because everyone is sold on the supreme necessity of a college education.

What's rare is valuable, and college graduates are no longer rare. I think even white collar environments are aware of this because I've been in companies where top performers and managers weren't college graduates. Credentials matter early on, but there's no substitute for creativity and performance. Our REAL educations never stop.

Generations have been told that the only way to get a good job is with a college degree. The student population and infrastructure have grown tremendously in that time. Tuition growth greatly out paces inflation.

That price inflation is the thing that can't be justified. The return on investment stinks. At some point students and especially parents will realize these bloated costs aren't worth the subpar education most institutions provide. Research and/or tenure are the goals of most profesors. Teaching is a distant third or completely ignored and left to the graduate teaching assistants.

Ridiculously high student loan debts are a result of a society that places too much emphasis on a hollow diploma.

Having my college paid for (by a trust fund set up by my grandparents) did NOT keep me from falling into the debt trap. Though for me it was all the credit card offers suddenly showing up in my mailbox.
I *really* wish my parents had sat me down to teach me about finances and money - would have saved me a lot of heartache and wasted years paying off debt accumulated in school as well as later. I think it's the parents responsibility, not schools. Though if the parents are living beyond their means how will the children learn (not that my parents did - they just never spoke about money)?
Happily I'm debt free now but still kick myself over all the money I could have saved or invested over the years that instead went to cc debt. Lesson learned at long last.

Parents need to teach kids about debt--and not just by sitting them down and explaining it, but also by modeling the correct use of debt and by commenting on the way others are using it. Every time they make some snide comment about debt being "the American way" they're educating more than they realize. Every time they shake their heads at some neighbor racking up yet more debt for a boat or a motorcycle or a vacation they're doing it some more.

It would be wrong to depend on our schools to teach proper money management, but surely basic skills like balancing a checkbook ought to be covered, along with things like compound interest.

In the end, of course, people need to take responsibility for their own finances--and yet I have a lot of sympathy for people who got off on the wrong foot when they were just 17 or 18 years old. Once you've signed off on your first year's college debt you're in deep enough that your best path out is probably though--even if that means three more years of racking up even more debt. And once you've done that, just living a normal life can easily lead to even more debt. It's unwise, but it's so much the normal course of events that an ordinary person can do things that are quite foolish, not because they're stupid or self-destructive, but just by going with the flow rather than thinking things through.

I have a good friend who took out thousands in student loans to go to law school expecting to get a good job and work to pay them off pretty quickly. Lo and behold she graduated 2 years ago and STILL can't find a job, much less a job as an attorney. She says if she'd known she never would have gone to law school (though her dream is to be a public defender) because it wasn't worth the hassle and the debt. She's screwed now - even though she passed the bar how will she find a job that pays well enough to pay those loans back if no one is hiring attorneys right now? Not to mention that the country is flooded with people graduating law school who ALSO can't find jobs. It's a vicious circle.

The idea that a college degree is your ticket to Easy Street has turned out to be a myth. Maybe most jobs don't require a college degree, but high-school educations in the U.S. have been weakened so much that college has become somewhat remedial.

At the same time, corporate management and legislation like NAFTA have led investors to believe that a degree is a degree, whether it comes from an American university or one from a country with a much lower cost of living (and educating).

And we've lived through a few generations of dishonoring skilled labor, like plumbers or auto mechanics -- even though _those_ jobs can pay well and are difficult to move offshore.

People's expectations are different, too. Used to be it was no big thing to start in a small apartment or house with used furniture and hand-me-down dishes; drive a beater (or, better, not have a car at all); save to buy stuff for hobbies once you were better established. Now, new college graduates are buying houses and fancy cars and have more credit -- and more debt -- than our grandparents ever dreamed of (or worried about).

You have to wonder if the current slowdown will be enough to nudge things in a different direction. I'm not hopeful.

Has anyone seen the animated presentation Money As Debt? It's on YouTube. It presents a very interesting concept that debt is absolutely essential for our economic system to run. In fact, it says that money is debt and without debt, we wouldn't have any currency in our economic system. We, or at least some of us, need to be in debt in order for our economy to run at all.

It's hard to believe, but I haven't been able to punch any holes through the reasoning presented in the video. If someone could offer an alternative analysis, I would love to hear it.

As a disclaimer, I'm going to say that I don't mean to attack or condescend. These are my thoughts, and I'm a very to-the point kind of guy, so I don't sugar coat my words.

My parents immigrated to the US form China in the 70's. My family is not rich, but not poor either. They made enough to cover all of our needs, but not much else. My parents owned a little restaurant and put in 14 hour days, 7 days a week; they worked hard for the money. I pretty much raised myself, taking the school bus to and from school, and maybe seeing my parents once a week because I also enrolled in a Saturday School program I found. I have made my own choices since I was in middle school, and my parents did not have an education beyond elementary/slight middle school level, so not much help from them especially when I understand English better than they do. I was more educated than they were, so not much they could offer in advice on issues besides money. Both my parents lived through the Communist Revolution in China and the poverty that came with it. They clearly taught me the difference between needs and wants because they could barely afford what we needed.

Your education is what you make of it. Just because you go to a better school doesn't mean you will receive a better education and a better job automatically.

To me, universities are there to grant degrees, not an education. After all, they are in the business of selling degrees. Knowledge, skills, and contacts are a consequence of the program. How much you take from that experience depends solely on you. And it is up to you to sell yourself during an interview. If you feel defeated, then your body language and mind set will show that.

If you want to succeed, you need to work for it, you need to earn it, and if you're lucky, you will receive it. Success is not a right. Many will try, only a few will prevail. Those who try the hardest are usually the ones to succeed.

When I was in college, I chose courses that would help me later on. I did not take the easy way out in getting my degree and I took extra courses to reinforce what I've learned. Even in high school, I was in the International Baccalaureate (IB) Program. For an elective, we were given IB Psychology, but my strengths were math and science and I guessed that I would be majoring in a math/science degree, so I requested to my counselor to allow me to take IB Physics as my elective instead, so I was taking two science courses, with one being an elective. For those unfamiliar with the IB program, here's a link to the mission statement, http://www.ibo.org/facts/fastfacts/index.cfm. To me, I did not want to waste time taking a class I have no interest or use for.

When I started my senior year in college, I couldn't get a professor to sponsor my Master's degree, and I didn't want to take $50k in loans. What did I do next? I went and got a resume and applied to any and all jobs I could find related to my degree. I knew I was at a severe disadvantage because I had zero industry experience and I was searching for an engineering position, but with each rejection, I learned from my mistakes and how to sell myself better. Every company I interviewed with started off the interview with something similar to "You're the only candidate that we agreed to interview without industry experience." Did it suck knowing I was dead last in their ranking right from the start? You bet. But it also gave me motivation and drive to change their opinion of me. Even if I don't get the position, they may have another position or may contact me in the future if I leave that much of an impression.

In the end, I graduated from college with $14k in student loans because i didn't want to be a full time student and have a full time job to pay my expense. I took a calculated risk hoping that I would be able to find a job to pay for my education, something that was dwindling the longer I stayed unemployed after graduation. I made the best of it, and got a part time job. Then, 4 months after graduation, a full 13 months since the day I started search, I got an offer 30 minutes after I left the interview.

I have worked hard for what I have attained. I do not take anything I have, even my first job, for granted. For those that easily got jobs when I was still unemployed? I truly wished them luck, I had no jealousy for them, and was happy for them. I took it as my bad luck, and just need to work harder.

Why is there no empathy from those who have pulled themselves from the depths of hell? Probably because they realize how foolish they themselves were. The Declaration of Independence states that we have certain unalienable rights, one being the pursuit of happiness. It doesn't say that happiness is a right, only the pursuit of happiness, therefore happiness comes from effort and is something that is earned. The second you get a sense of entitlement, you've fallen into the trap.
The only thing you can do is do everything to pursue your dream. You have to put all your effort into improving yourself to give you the opportunities you seek.

But you say that there are tons of people who didn't have to work for it. Well, for all the people that want to complain, all I gotta say is that the world is inherently unfair, something we both have experience with.

Yes it is sad most of us get caught in the "debt-wage" trap before we even had a chance. That is why I found "Rich Dad, Poor Dad" so helpful. He's made an industry out of it but the first book was a simple but important education about how money works. Very glad I found the book 4 years ago.

There is no mention of 'the other' debt.
The debt none of us created, yet pay a substantial amount toward.
It is the debt created by our governments, which taxation is raised to pay off.

Not only must we strive to pay off our personal debts, but those of an unaccountable group of overseers who have lavishly gone to town on a global domination expansion well beyond the insignificant debts we all, at some point, have to sign up to to survive.

I think my situation was quite paradoxical. My near-complete ignorance of financial matters as a young person actually protected me from getting into debt. ;-). It's a long story, but briefly, my parents told me nothing, and implied we were dirt poor - but were unwilling to even fill out financial forms, so student loans were not an option, and I could not ask them for money. So from age 18, when I moved away to college, I was on my own. I won scholarships that covered tuition and books, but for housing, food, and other expenses, I was on my own. It never, ever occurred to me to seek loans or ask anyone for help. I worked multiple low-paid part-time jobs, 30+ hours a week, supplemented with seasonal or occasional work, like ushering graduations or participating in focus groups. I also cut costs every way I could - lived with a room-mate in a dirt cheap student apartment where everyone contributed cleaning & maintenance work for part of the rent, worked an afternoon a month at a food co-op for 15% discount on their stock, and ate my meals at work when I could (I waitressed, & a small meal was a benefit, & if someone messed up a pizza order we were allowed to take home mistakes). I ate a lot of rice and beans, and gathered fruit from trees on campus that were available to students. I grew tomatoes and herbs on my balcony. Yes, sometimes I went hungry, and once I was technically homeless, though between friends' couches and floors and a few nights in a tent, I managed. You get the idea what my version of the "college experience" looked like. I did still pull A's, but i do think i might have done a bit better still if my finances had been less precarious. Anyway, I graduated without a penny of loan debt. And then did 2 graduate degrees. And yes, I've made a few mistakes since, but got out the same way I got through undergrad - working extra, whenever I could and at anything I could find, and cutting expenses as much as I could. It was really difficult, but in retrospect, I'm glad. It didn't keep me from making a few mistakes since, but my husband and I have much the same story, so we have much the same attitudes and ideas, and we clawed our way back out of trouble, adjusting again and again, with every bump in the road. And yes, I credit my extreme ignorance - student loans weren't big stories like they are now, and I knew nothing. All I knew was that if you needed money, you worked for it. I know that's not always easy or even possible, but it was all I knew, and the attitude, combined with a willingness to do any work at all, has saved me again and again.

This is exactly the type of post I was looking for. I talk to so many people who live paycheck to paycheck (or worse), and they just don't seem to "get it". It's like they don't read the news about the reasons people go bankrupt, or whatever.

In any case, I'm fanatical about saving money, and that's good enough for me. I'm actually putting together an article on the credit card industry and I think this will be a good resource.

Good article. It always amazes me how parents who will take a bullet for their child will let them be victimized by the high debt student loan predators. Student loans can certainly make sense in some cases, but many young people don't have sufficient life experience to truly evaluate the choice.